Saturday, May 27, 2017
The Myanmar Times
The Myanmar Times

Hong Kong, Shanghai and Singapore to offer support for gold exchange market

The operators of gold exchange in Hong Kong, Shanghai and Singapore have offered the Myanmar government professional and technical support in order to establish a bourse in the country for trading the precious, according to the Myanmar Gold Entrepreneurs Association (MGEA).

At present, gold are being smuggled abroad as the metal is still on the list of restricted goods. Photo - ShutterstockAt present, gold are being smuggled abroad as the metal is still on the list of restricted goods. Photo - Shutterstock

In the last two years, the Myanmar government and industry associations have been seeking to set up an exchange market where gold and metal could be freely traded in one place.

Myanmar is currently trying to establish one with external support, and discussions are taking place.

MGEA secretary U Kyaw Win said a gold exchange from Hong Kong and another from Shanghai, as well as Singapore Gold Bullion Market Association, have offered Myanmar advisory and technical support.

“They [the operators in Hong Kong, Shanghai and Singapore] met with the Myanmar Chamber of Commerce and discussed with our association.

“They are keen to provide expertise and advisory service. These organisations have a wide range of experience in the gold exchange market. I think they will assist us with their knowledge about trading connections within the international circle,” he said.

Chinese Gold and Silver Exchange Society’s president Haywood Cheung Tak-hay was quoted in the South China Morning Post as saying that gold exchange from Hong Kong would help the establishment of gold exchange market in Myanmar.

“This is the right timing for Myanmar to establish a gold exchange as the country is very keen on modernising its economy,” Cheung said.

“Myanmar lies on the route of China’s One Belt One Road project, which enables it to capture the growing opportunities of commodities and other types of trading in the region,” he added.

This is the first attempt in the century-old history of the Hong Kong bourse, set up in 1910, to expand its services overseas.

Myanmar’s state-run newspaper re-published the report after the article was forwarded by the Myanmar embassy in Hong Kong.

Among the operators and exchange markets in the three cities – Hong kong, Shanghai and Singapore, Shanghai Gold Exchange is the world’s biggest physical bullion exchange but Hong Kong’s gold exchange is more transparent and more compatible with the international standard.

The Hong Kong’s market also has a wider set of expertise and services and hence is seen as a more suitable option.

“There are facilitators for this plan. But we need to be sure that it is legally allowed.

“There are also other questions. Even if the plan is allowed, there is a need to consider the details, such as how much trade will be allowed in the local market,” U Kyaw Win added.

At present, gold are being smuggled abroad as the metal is still on the list of restricted goods.

If an official gold exchange market is established, Myanmar can trade the metal freely with the international community. 

Respective ministries are still conducting negotiations with relevant parties.

It is hoped that there will be a sound policy regarding the issue. The ministries also aim to establish the gold exchange market within 2017.

Back in 2015, the MGEA first sent its proposal for an exchange market to be established to the commerce and finance ministries.

Industry figures making the argument for an exchange market have also pointed to countries such as China, where they say official exchanges for gold trading have reduced illegal trading and smuggling.

Myanmar Gold Development Public Company Limited, which was set up by the gold entrepreneurs association, will be in charge of setting up the exchange, according to U Kyaw Win earlier this year. But the relevant ministries and the Central Bank are all involved in the consultations.

“We can’t create the exchange just among us entrepreneurs,” he said. “We can’t lay down policy, only the state can provide that. If the [relevant government departments] help us then the market will appear sooner or later.”

The central exchange would also allow people in other countries to buy gold from Myanmar more easily, but the commerce ministry first needs to remove gold from the list of restricted exports, he added.

U Khin Maung Lwin, an assistant secretary at the commerce ministry, told The Myanmar Times in August 2016 that gold would be removed, along with several other commodities.

U Kyaw Win at that time also noted that the removal was likely to occur once the ministry had finished its final draft of the gold trading rules and regulations. 

Translation by Zar Zar Soe